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[2018] what is cryptocurrency?

what is cryptocurrency?

Thank you so much friends for such an overwhelming response for last few articles.As per your mails and sms I am taking today cryptocurrency for discussion.This article about cryptocurrency will be bit longer as compared to my previous ones.I have already written an article about Binance , chinese crypto currency exchange.Let's unfold the secrets of cryptocurrency.

Highlights:

Definition of Cryptocurrency.

Cryptocurrency List.

Cryptocurrency Exchange.

Cryptocurrency Market Capitalization.

Cryptocurrency Mining.

What is Cryptocurrency?

Cryptocurrency is a digital asset which is designed to work as a medium of exchange.

Cryptocurrency uses the concept of cryptography to perform below functions.

To secure its transaction.

To control the creation of addition units.

To verify the transfer of assets.

A Cryptocurrencyis stored electronically in blockchains and has no physical presence.You can't redeem cryptocurrency in any other commodity like gold,silver etc.

The network of Cryptocurrency is completely decentralized and any government across the globe has no control on its supply.

Bitcoin,Ripple,LSK are some of the examples of cryptocurrency.

How and when Cryptocurrency originated?

The invention of "blinding" algorithm by David Chaum laid the foundation of cryptocurrency. Moving further this algorithm led to the invention of "blinded money" which was used for secure and unaltered information exchange between the parties.After seeing the overwhelming response of this concept,David decided to commercialise blinded money by founding a company called Digicash.Unlike current cryptocurrency Digicash wasn't decentralised.The company initially dealt directly with individuals but Netherland's government doesn't approved the idea and the company was forced to sell to licensed bank.Microsoft was the first company to approach Digicash for a potential partnership so that early window user's can use cryptocurrency but the two companies couldn't agree on terms and conditions .

At the same the Wei Dai published a white paper on b-money but unfortunately it was never deployed as a means of exchange.

Later Nick Szabo, an associate of David Chaum released a cryptocurrency named Bit Gold but it neither get popularity nor is it used any more as mode of exchange.

United States in late 1990s and mid 2000s show the rise of a cryptocurrency named e-gold.The cryptocurrency was named after the Florida company e-gold .E-gold works on concept of digital gold buying wherein the customers of the company used to send their old gold jewellery ,gold coins or other gold items to warehouse of e-gold and in return used to get digital e-gold currency which they could use for trading or they could convert it to US dollars.The concept was very popular and in mid 2000s the company e-gold completed millions of transaction but later due to the legal pressure e-gold seize to operate in 2009.One of the important drawback was company's incapability to deal with hackers and scammers.

[09 January 2009]-First successful Cryptocurrency came into existence. Satoshi Nakamoto was the inventor of this decentralized digital cash system named "Bitcoin".We will talk about bitcoin in detail in "Cryptocurrency list" segment.

[Cryptocurrency Terminology]

Encryption-It's a process of converting information or data into code to prevent unauthorized access.Address-It is defined as public key in the pair of key used to digitally sign transaction.In other words it's a code used to send,receive or store cryptocurrency consisting of 26 to 35 alphanumeric characters.Altcoin-Any form of digital cryptocurrency that is not Bitcoin.Blockchain-It's the full list of all the bitcoin mined since the origin of Bitcoin.Block Reward-Reward given to a miner after successfully hashing a transaction block.Mining Difficulty-Tells about difficulty level of hashing a new block.Dust Transaction-A transaction of very little monetary value but takes space in blockchain.Escrow-The process of holding an asset in third party account to protect it during asynchronous transaction.Fiat-Any form of physical currency.FOMO-It is defined as Fear of Missing Out.FUD-Defined as Fear,Uncertainty,Doubt.Faucet-The technique used in launching of an altcoin.Hardfork-Block structure alteration of bitcoin leading to change in difficulty rules.Hash-It's a process of producing short length fixed data as output from variable amount of data as input.ICO-Initial coin offering.Mining-Process of generating new cryptocurrency.Pump and Dump-It's defined as inflating the value of asset acquired at very less price by means of advertisement or misleading statements.QR code-A graphical block containing a monochromatic pattern.Shorting-The process of selling a cryptocurrency in a hope of buying it later at low price.Wallet-A physical address in which a cryptocurrency can be sent,stored or received.Whale-An individual or an organisation who possess a majority percentage of cryptocurrency.Whitepaper- Document describing cryptocurrency protocol.Volatility-Measurement of price movement over time.Proof of Work-System that ties mining capability and computational power.Proof of Stake-An alternative of Proof of Work.

[Why cryptocurrency is the future coin?]

Credit [Coinomia]

[How cryptocurrency transaction works?]-Bitcoin is an example of cryptocurrency.

[23 Best Cryptocurrency List]

BITCOIN-It is the first decentralised digital currency which works without the interference of central bank.Bitcoin works on peer-to-peer basis and the transaction take place between the users directly without any intermediary.Network nodes uses cryptography to verify these transaction and the details are stored in public distributed laser called block chain.No one knows who invented Bitcoin?It's said that bitcoin was invented by Satoshi Nakamoto but nothing much is available about him.February 2015 played a crucial role in taking digital currency to next level as around 100000 vendors and merchants accepted bitcoin as payment.

According to researchers from University of Cambridge ,Cryptocurrency will have a unique user base of 5.8 million users till the end of 2017.

Electroneum-It is said that electroneum is the first cryptocurrency designed for mobile usability .The purpose of this currency is to give non technical user a chance to trade a mobile user friendly cryptocurrency called electroneum. Electroneum App are available both in iOS and Android.App contains easy wallet function that helps the user to understand and trade efficiently.

Ripple-This cryptocurrency was launched in 2012 and the differentiating factor is its legitimate connection with banks.Ripple can't be mined or created .Currently 38 billion ripple coins are in circulation.Ripple payment network RippleNet uses block chain technology.

LSK-This cryptocurrency can be defined as first modular cryptocurrency which uses the concept of "Modules".As the name suggests these modules forms the basis of this cryptocurrency design and construction.The design of this cryptocurrency is it's USP as it allows anyone to use the design block and created their own decentralised app.

Ethereum-This cryptocurrency is defined as distributed public blockchain network which focuses on running the programming code of any decentralised application. Ethereum is developer friendly cryptocurrency as it allows developer to create the operation as per their need without any limitation.

Doge-This decentralised cryptocurrency is also known as "Internet currency" and the USP of this cryptocurrency is it's vibrant Dogecoin community.

LiteCoin-Charlie Lee created this cryptocurrency. First 'altcoin' to alter Bitcoin.This cryptocurrency possess speed as it's USP.This coin only takes 2.5 minutes to generate a block or a transaction to happen as compared to 10 mins for Bitcoin.

DigiByte-An open source decentralised cryptocurrency that runs on DigiByte blockchain.It is said that this cryptocurrency is the longest public blockchain into existence.Jared Tate is the creator of this cryptocurrency and mined the first DigiByte block on January 10,2014.

Monetha-It's an Ethereum based mobile payment platform.The developer of this cryptocurrency define it as a combination of PayPal and Trustpilot.

PotCoin-A peer to peer cryptocurrency which was developed with an aim to be standard form of payment for the legalised cannabis industry.This cryptocurrency was released via GitHub on January 21,2014.

ARK-The concept behind this coin is to make cryptocurrency more socially acceptable.ARK transaction will be faster as compared to Bitcoin.

Steem-This cryptocurrency was launched in March 2016 and SHA-256 is the type of algorithm used. Steem uses the concept of social media such as upvotes,shares,likes and incorporates it into an idiosyncratic platform that pays user for their contribution .

IOTA-A cryptocurrency founded in 2015 and runs on a system called "The Tangle" that provides secure communication and payment between machines on Internet of Things.

CIVIC-This cryptocurrency helps you to protect and authorize the use of your identity in real time.Your identity will be verified using decentralized block chain architecture as well as biometric on the mobile device.

CARDANO SL-IOHK designed and developed this cryptocurrency.It's said that this cryptocurrency is reimagined bitcoin with a potential to fix its flaws.

Verge-The USP of this cryptocurrency is "Privacy".This coin provides flexible option to both individual and business to send and receive payments.

Dash-Dash is nothing but digital cash you can send anywhere.This cryptocurrency currently offers instant transaction as well as private transaction.

ARDR-Ardor is the platform that works with main blockchain and child blockchain.The associate cryptocurrency for this platform is ARDR.When the transaction fees are chraged within the child blockchain then ARDR comes into play.

Strat-It's the cryptocurrency that runs Stratis platform.Strat is supported currently by Ledger Nano S wallet.

Power Ledger-This cryptocurrency symbol is "POWR" .You can't do mining for this coin.

TenX-This cryptocurrency started it's life as a payment card attached to Bitcoin wallet.

ZCASH-The main motive of this cryptocurrency is to provide enhanced privacy to it's user as compared to Bitcoin.These coins are either in transparent pool or shield pool.

Nav Coin-This coin is said to be world's first fully anonymous cryptocurrency that runs purely on block chain technology.To direct transaction between receiving and sending server this cryptocurrency uses a secondary blockchain called "SubChain".

What is a cryptocurrency exchange?An online platform where you can exchange one cryptocurrency from other.Depending on the nature of the exchange you can transact like stock or currency.I will explain each type of exchange to make cryptocurrency exchange a bit familiar to you.

Traditional Exchange-Buyers and sellers trade based on the current market price of the cryptocurrency.These type of exchange take fee for each transaction.

Cryptocurrency Broker-These are online website based cryptocurrency that allows anyone to buy and sell cryptocurrencies at price fixed by the broker which is generally sum of market price plus a small brokerage commission.

Cryptocurrency Funds-GBTC is the best example of these kinds of exchange .You can call them pools of professionally managed cryptocurrency assets.

[Check out these things before joining any cryptocurrency exchange else ..........]

Exchange Rate- You need to do lots of research before joining any exchange.I hope you will be aware that different cryptocurrency exchange have different rates.Looking out for feedback,references etc can definitely help you to save the amount of money you can't even imagine.

Geographical Limitations-Make sure that you know all terms and conditions related to the exchange you want to join.Some cryptocurrency exchanges provide geography based user function accessibility.It simply means that if you belong to particular geography you may get some additional features as compared to those who belongs from some other region.

Verification Process-Taking decision to join any exchange can largely depends on the identification process followed .You will find some exchange taking a week or more for the verification but it is good to protect exchange from hacking or other unwanted activities.To make things more clear please do read a detailed article on BINANCE verification.Never join any cryptocurrency exchange which allows you to remain anonymous.

[Cryptocurrency Exchanges you can't afford to MISS]

Guys personally this is my favorite exchange .I have read very good reviews about coinbase .This cryptocurrency platform is backed by some well known investors and millions of customer globally says all about coinbase.

This largest Bitcoin exchange in exchange in euro volume was founded in 2011.I will say this cryptocurrency exchange is a great choice for experienced traders.The best part is that it allows you to trade altcoin as well.

Pros-

Good Reputation

User Friendly

Minimal exchange,deposit and transaction fees.

Cons-

Not suitable for Beginners.

Limited payment method.

This is perhaps the best platform to trade fiat money with cryptocurrencies and vice versa.For professional Bitcoin traders CEXO.IO offers personalised dashboard .It also provides brokerage service.

Pros-

Great Reputation.

Decent exchange rates.

Good mobile usability.

Cons-

Not a great customer support service.

A unique exchange which is great demand by traders who wants instant straightforward trade without following the process of login and signup.I am recommend this exchange to guys who are reluctant in allowing cryptocurrency exchange to hold their funds.It support a long list of altcoin. This exchange prohibits the use of fiat money and only allows transaction between bitcoin and supported altcoin.

Pros-

Beginner's Friendly.

Good Reputation.

Supports a long list of Cryptocurrency.

Cons-

Limited Payment Option.

No use of Fiat Money.

Data Analysis and advance tools for advance traders give this exchange an edge.It supports more than 100 altcoin.It provides chat box to its user.

Pros-

High Volume Trading.

BTC Lending.

Cons-

No Fiat Money support.

An Europeon Union based Bitcoin exchange which has presented itself as one of the safest exchange across the globe.Some of it's unique features are two step authentication,multisig technology for its wallet and fully insured cold storage.A multi lingual user interface and 24*7 customer support makes this cryptocurrency exchange user friendly.

Pros-

High level security.

Worldwide availability.

Cons-

Limited Payment Method.

High Deposit Fee.

A P2P cryptocurrency exchange with buyers and sellers across the globe.This exchange exploits the concept of glocalisation where you can meet up the bitcoin user and buy and sell to them accordingly.Pros-No ID required.Available worldwide.Cons-High Exchange Rates.

This cryptocurrency exchange deals in Bitcoin and ether.It's a licensed US cryptocurrency exchange.Founded by Taylor and Cameron this exchange deals in three currency i,e dollar,bitcoin and ether.The platform is available to only certain countries and all the deposits and withdrawals are free of costs.

This cryptocurrency exchange is great in demand across the globe.Guys any guess?This exchange allows users to buy cryptocurrencies like Bitcoin or Ether instantly from their local currency.Though the service is available across the globe but all it's functions aren't.Buy cryptocurrency instantly from CoinMamaPros-Wide range of payment options.Superlative user interface.Cons-High exchange rates.

No need for registration in this exchange.It allows the users to instantly buy or sell cryptocurrency with fiat money or cryptocurrency itself.Stay anonymous and enjoy cryptocurrency trading.Pros-No signup.Open Source.Many altcoin available for trading.Cons-Minimum payment option available.

[Cryptocurrency Market Capitalization]

source-CoinMarketCap

Market Capitalization is defined as the product of price of cryptocurrency and circulating supply.

Market Cap=Price(cryptocurrency)*Circulating supply.

Difference between Circulating supply,Total supply and Max supply?

As the name suggests circulating supply is the approximate number of coins circulating in the market.On the other hand total supply is defined as total number of coins in existence.Max supply is related to maximum number of coins that will ever exist in the lifetime of that particular cryptocurrency.

Above chart depicts the market capitalisation value of different cryptocurrency taken from CoinMarketCap.I hope these data will give you a fair idea about "What all is happening in cryptocurrency market?"

[Cryptocurrency Mining]

Cryptocurrency mining works on the concept of block rewards.

We will explain the mining concept by taking Bitcoin as an example.

To start the process of mining Bitcoin first you need to invest a decent amount of money and upgrade your hardware.

First try to understand when a miner is paid and to understand it you need to understand the transaction process in detail.

Whenever a new transaction comes it needs to be added in blockchain.

Specialized hardware and data keys are used by miners to encrypt the block transaction data into "hash".

Now this hash is added into block and authenticate it and moving further this block is added to blockchain.

On completing a block only miners are paid and the rate of work fluctuates on the number of transaction happening across the globe.

For mining you need a bitcoin miner which in most of the cases is a separate computer performing all the mining task.

A bitcoin mining calculator will help you to know the real amount of money you can earn from mining.

To my knowledge and understanding of bitcoin mining I can say you that a good mining will cost you around $500 and the as said earlier the result totally depends upon the rate of transaction happening .On an average you can earn around $100 monthly .So frankly speaking it will take sometime for you to do break even.

Moving further you will need wallet to successfully execute Bitcoin transaction.I have explained about wallet in Ripple cryptocurrency article previously.

Below you can find a comparison chart of Bitcoin Mining Hardware or "BTC Miner".This chart will help you to take decision which Bitcoin mining hardware you want to buy.

You can BUY any of the above miner depending upon your choice by clicking the below link.These are the most efficient miner in the market.

A high hash rate and good efficiency are two important criteria to be taken into consideration while buying a Bitcoin mining hardware.

A decent efficiency means less electricity cost per hash.

Moving further you need to pick your mining software.You need to be very careful while selecting your bitcoin mining hardware .Here you will have an upper edge if you are tech savvy and if you aren't then don't worry we will guide you based on our experience .

Incase you don't have much experience with basic command interface then straight forward go for GUIMiner as it will be your best bet.

Once you are done with your basics so now you are ready to be a BTC Miner.I suggest every individual who is new to cryptocurrency mining so find a reliable pool for initial support and success.Mining pools can be defined as communities of cryptocurrency miners who work together as a team and shares the reward.The benefits are regular payouts and efficient utilization of time in completing the block.

Characteristics of reliable and efficient pools are as belows.

Long duration of existence of pool.

A competitive charge.

Efficiency based distribution of rewards.

Frequency of finding the block.

Flexible withdrawal option.

Now we came to the last part of "How to become a successful BTC Miner?"Their is an old proverb "Change is only constant" and same holds true with bitcoin mining.Remember you need to keep updating your mining equipments else you will be left behind .Most of the BTC Miners update their equipments on regular basis to get block faster.

I hope you would have loved this article.Kindly do share with your friends,colleagues and anyone and everyone you think this article will add value.We put lots of effort to bring best on the table.
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